Question

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the effect of the carbon price floor on (a) carbon leakage rates, (b) the relocation of energy intensive industry overseas and (c) UK and EU carbon dioxide emissions.

The costs of the Carbon Price Floor on business are largely indirect, passed through in bills by their electricity supplier. However, the Department for Energy and Climate Change’s Prices and Bills report estimates that in 2014 the Carbon Price Floor increased the price per MWh of electricity for the average uncompensated energy intensive business by £4. The Government pays compensation to the most electricity intensive industries which reduces the price impact for the average compensated energy intensive business in 2014 to £2 per MWh.

My Department keeps the risk of carbon leakage under regular review.